Former Regions Bank Executive Agrees to Plead Guilty in $5 Million Bribery and Wire Fraud Scheme
BIRMINGHAM – A former senior vice president at Regions Bank has agreed to plead guilty to conspiracy charges in a $5 million bribery and wire fraud scheme, announced Acting U.S. Attorney Robert O. Posey and FBI Special Agent in Charge Roger C. Stanton.
The U.S. Attorney’s Office on Wednesday filed a plea agreement in U.S. District Court with PHILIP HENRY COOPER, 67, of Birmingham. As part of the agreement, Cooper pledges to plead guilty to conspiracy to solicit and accept bribes for steering Regions’ business to a company established by a co-conspirator, and to conspiracy to launder the millions of dollars the conspirators received as part of the scheme.
Along with his two co-conspirators, Cooper agrees to repay Regions $5.1 million, according to the plea agreement. Cooper also agreed to forfeit approximately $1.5 million he received from the scheme.
Cooper was indicted last year along with Richard Alan Henderson, 57, of Hoover, on conspiracy, bank bribery, wire fraud affecting a financial institution and money laundering charges. Henderson, who also was a senior vice president at Regions, is scheduled for trial on those charges in June.
A third conspirator in the case, Jesse Stewart Ellis, 56, of Hoover, pleaded guilty last year to conspiracy to commit bank bribery and wire fraud, and money laundering conspiracy. He is scheduled for sentencing June 26.
Henderson and Cooper served as senior officers of Regions Bank. Through a wholly-owned subsidiary, Regions Equipment Financing Company, Regions Bank offered business customers various financing tools, including equipment financing and lease options. Henderson was first assigned to be finance manager of REFCO and was later promoted by Regions Bank to REFCO’s chief administrative officer. Cooper worked for Regions Bank as REFCO’s asset manager.
According to Cooper’s plea agreement, he and Henderson recruited Ellis to establish a company that would enter an agreement with REFCO to provide residual value insurance, a type of insurance designed to manage asset value risk and provide favorable accounting treatment on leases for Regions Bank. Ellis had no experience providing residual value insurance. The defendants directed REFCO’s residual value insurance business to Ellis’ new company, and Ellis, in return, split the money paid to him with Henderson and Cooper, according to the charges and Cooper’s plea agreement. Cooper and Henderson concealed from Regions that they were receiving money as a result of directing residual value insurance business to the company Ellis established.
Between Sept. 2010 and Nov. 2015, REFCO paid Ellis’ company, Residual Assurance Inc., about $5.1 million. Henderson received about $1.8 million as a result of the scheme and Cooper received about $1.5 million, according to Cooper’s plea agreement.
In 2014, after initially receiving his share of the bribery money in cash, Cooper established a company named Capital Equipment Appraisal Service to receive his payments, according to the plea agreement. After May 2014, Ellis deposited most of Cooper’s share of the bribery payments into a Wells Fargo Bank account Cooper opened for that company. Cooper also had a part of his share of the money deposited into an account at Merrill Lynch, according to the plea agreement.
The maximum penalty for conspiracy is five years in prison and a $250,000 fine. The maximum penalty for money laundering conspiracy is 20 years in prison and a fine of $500,000 or twice the value of the property involved in the transaction, whichever is greater. As part of the plea agreement, the government recommends a five-year prison sentence for Cooper.
The FBI investigated the case, which Assistant U.S. Attorneys George A. Martin Jr., Henry B. Cornelius, and John B. Ward are prosecuting.